$700 Million Stuck in 115,000 Unconfirmed Bitcoin Transactions

Bitcoin recently saw a meteoric rise in value over the past 30 days, but soon endured a major correction and saw its value drop from $7,500 to $6,407.62 at press time. The bitcoin dominance index dropped from over 62 percent to 53.4 percent following the “death” of the SegWit2x hard fork.

The cryptocurrency has seen better days, as according to Blockchain.info there are now 115,003 unconfirmed transactions, meaning the mempool has once again surpassed the 100 million byte mark – which hasn’t happened for nearly three months. According to tradeblock, these unconfirmed transactions amount to 110,611 BTC, worth over $700 million, weighting about 36 MB.

With the cancellation of the SegWit2x hard fork, various investors started selling their bitcoin and turning to other cryptocurrencies, as they will no longer receive “airdropped” tokens. Some also speculate existing bitcoiners are turning to Bitcoin Cash because of its flexible block size limit, justifying bitcoin’s recent decline.

Whenever bitcoin’s mempool is filled with unconfirmed transactions, mining software picks the transactions that paid the highest fees. This means that users who want to send important Bitcoin transactions are currently advised to attach higher fees to them in order to get them through.

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According to estimates, the fastest and cheapest transaction fee – at press time – would be of 480 satoshis/byte. Taking into account a median transaction size of 226 bytes, this would result in a 108,480 satoshi fee, equivalent to nearly $7. The higher the fee, the faster the transaction will go through.

Fees are expected to remain high in the long-term, even after the adoption of SegWit. On Twitter, Bitcoin Core developer Peter Todd stated that it’s important not to oversell SegWit

Is Bitcoin under attack?

Some users claim that what’s currently happening to the number one cryptocurrency is an attack. As covered by CCN, Bitcoin Cash has been surging in value, so much so it is up to $1,257.57 per token, up from little over $620 last week. BCH’s surge seems to be inorganic, as a large part of the market is currently concentrated in South Korea. According to CoinMarketCap Bitcoin Cash’s trading value on South Korean exchange Bithumb surpassed $2 billion, 36% of the total volume. If we add other South Korean exchanges, Coinone and Korbit, the volume nears 50%.

It seems plausible Bitcoin Cash’s ecosystem has been attracting bitcoiners frustrated with the cryptocurrency’s current situation, as according to Blockchair Bitcoin’s fees recently climbed to a new all-time high, while Bitcoin Cash’s fees are still low.

The recent increase in the number of unconfirmed transactions may be justified with a surge in the cryptocurrency’s trading volume, partly triggered by its recent price surge, and subsequent decline following the SegWit2x cancellation.

However, some believe the number of unconfirmed transactions is increasing due to a surge in fake transactions, and that fear, uncertainty, and doubt (FUD) are currently being spread by actors trying to push altcoins. Redditors on the r/bitcoin subreddit claim that bitcoin is currently under attack, and things might look scary for newcomers. He wrote:

“Spam transactions galore; fud on every crypto Reddit; hash power temporarily drained off to B cash. Honestly, we’ve seen every one of these before. Nothing is different. Each time this happens, newbies panic and buy some altcoin(s) and then they are left holding the bag when the value flows back to bitcoin and a new wave of users comes in, driving the price up to new highs and becoming the targets of the next alt pump. It’s a cycle that keeps repeating.”